LESSON 12-1 Preparing Payroll Time Cards 4/24/2017 LESSON 13-1 Preparing Payroll Time Cards

TERMS REVIEW salary pay period payroll total earnings LESSON

ANALYZING A PAYROLL TIME CARD LESSON 13

CALCULATING EMPLOYEE HOURS WORKED 1. Calculate the number of regular hours for each day and enter the amounts. 1 2. Calculate the number of overtime hours and enter the amounts. 3. Add Hours Reg and Hours OT columns and enter the totals. 2 4. Add the Hours column. 3 4 LESSON 13

CALCULATING EMPLOYEE TOTAL EARNINGS 1. Enter the rate for regular time in the Rate column. 2. Calculate the regular earnings. Enter the amount. 3. Enter the rate for overtime. 4. Calculate the overtime earnings. Enter the amount. 5. Add the Amount column to calculate total earnings. Enter the amount of total earnings. 1 2 4 3 5 LESSON 13

Audit Understanding What is a payroll? How many hours were worked by an employee who arrived at 8:29 and departed at 12:02? How does Omni calculate overtime earning? What are the total earnings of an employee who worked 40 hours and earned $11.00 per hour? LESSON 12-1

LESSON 12-1 Determining Payroll Tax Withholding 4/24/2017 LESSON 13-2 Determining Payroll Tax Withholding

TERMS REVIEW payroll taxes withholding allowance social security tax Medicare tax tax base LESSON 13

LESSON 13-2 Payroll Taxes – Taxes based on the payroll of a business. 4/24/2017 LESSON 13-2 Payroll Taxes – Taxes based on the payroll of a business. Required by law to withhold certain payroll taxes Payroll taxes withheld are a liability for the company until payment is made to the government

LESSON 12-1 4/24/2017 LESSON 13-2 Employee Income Tax – A business must withhold federal income taxes from employee total earnings Federal Income taxes withheld must be sent to the federal government periodically Most states withhold state income tax Some states withhold city or country income taxes as well

EMPLOYEE’S WITHHOLDING ALLOWANCE CERTIFICATE 3 2 1 4 5 1. Write the employee’s name and address 2. Write the employee’s social security number. 3. Check the appropriate marital status block. 4. Write the total number of withholding allowances claimed. 5. The employee signs and dates the form. LESSON 13

EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONS 1 2 3 1. Select the appropriate table. 2. Locate the employee’s total earnings. 3. Intersection of wages and number of allowances column. LESSON 13

Employee SS and MD Tax Social Security & Medicare tax FICA – Federal Insurance Contributions Act provides for a federal system of old-age, survivors, disability, and hospital insurance. Social Security (SS) – For old age, survivors and disability Medicare (MD) – for hospital insurance FICA taxes are paid by EMPLOYEES and EMPLOYERS SS is calculated on employee earnings up to a maximum paid in calendar year. The Maximum amount is called the TAX BASE. The rate used for SS is 6.2% or the factor of .062. Medicare has no tax base (No maximum earnings) The rate used for MD is 1.45% or the factor of .0145 LESSON 13

Audit Your Understanding Where does an employer get the information used to determine the amount of federal income tax to withhold from employees’ earning? Employee federal income tax withholdings are based on what two factors? Does the employer or employee pay social security tax and Medicare tax? LESSON 12-1

LESSON 12-1 Preparing Payroll Records 4/24/2017 LESSON 13-3 Preparing Payroll Records

TERMS REVIEW payroll register net pay employee earnings record page 355 payroll register net pay employee earnings record LESSON 12-1

LESSON 12-1 4/24/2017 LESSON 13-3 Payroll Register – A business form used to record and summarize payroll information. Gross Pay – Total Earnings with no deductions Deductions – Amount withheld from pay for taxes, insurance or investment. Net Pay – Total earnings paid to an employee AFTER all deductions have been subtracted.

PAYROLL REGISTER 1. Pay period date 2 11 4 5 6 7 8 9 10 3 13 12 1. Pay period date 8. Health insurance premium deductions 2. Payment date 9. Other employee payroll deductions 3. Employee personal data 10. Total deductions 4. Earnings 11. Net pay 5. Federal income tax withheld 12. Total, prove, and rule 6. Social security tax withheld 13. Check number 7. Medicare tax withheld LESSON 13

LESSON 12-1 4/24/2017 LESSON 12-3 Employee Earnings Record – A business form used to record details affecting make to an employee.

EMPLOYEE EARNINGS RECORDS page 353 1. Last day of quarter 4 2. Employee personal data 5 3. Beginning accumulated earnings 1 2 4. Pay period 3 5. Earnings, deductions, net pay 6 6. Updated accumulated earnings 7 7. Total and prove LESSON 12-1

Audit Your Understanding What does the payroll register summarize? How is net pay calculated? Why do companies complete employee earnings records? LESSON 12-1

LESSON 12-1 Preparing Payroll Checks 4/24/2017 LESSON 13-4 Preparing Payroll Checks

LESSON 13-4 Payroll Bank Account 4/24/2017 LESSON 13-4 Payroll Bank Account A check for total net pay is written on Company’s general checking Account to the Company’s Payroll checking account

PAYROLL BANK ACCOUNT 1 2 1. Prepare the check stub. LESSON 13

LESSON 13-4 Employee’s Payroll Check 4/24/2017 LESSON 13-4 Employee’s Payroll Check Information for check is taken from the payroll register. The check will have a detachable “stub” with detailed information on employee earnings and amounts deducted.

EMPLOYEE’S PAYROLL CHECK 1 2 1. Prepare the check stub of each employee’s payroll check. 2. Prepare each employee’s payroll check. LESSON 13

LESSON 13-4 Electronic Funds Transfer (EFT) 4/24/2017 LESSON 13-4 Electronic Funds Transfer (EFT) Computerized cash payments system that transfers funds without the use of checks, currency or other paper documents The business deposits the net earnings into the employee’s bank account electronically. The employee receives a statement of earnings and deductions similar to a check “stub”.

Audit Your Understanding Why does Omni Import have a separate checking account for payroll checks? What is the source of the information that is recorded on each employee’s payroll check stub? How do payroll procedures differ for an employee who requests that her pay be deposited through electronic funds transfer? LESSON 12-1